Getting The Right Cover
Overseas costs can be formidable and emergencies may destroy your budget. Here is the low-down on getting the right travel insurance
Are you ready for that great trip abroad this summer - picked your favourite spot, booked your vacation and planned your activities? Wait a minute, though; have you taken an adequate travel cover prior to your trip? Nothing is too safe nowadays and there can be high-impact incidents - right from travel delays and flight cancellations to illnesses/injuries, loss or theft of passport, money and baggage, and worse still, unforeseen sociopolitical issues that can leave you stranded. Things tend to escalate when you are travelling overseas. But your travel insurance can come in handy in such cases, ensuring that you do not end up spending a fortune.
Whether you are a holidaymaker visiting a foreign land or on an important business trip, picking the right insurance is bound to be a tough task. For one, there are several plans to choose from, and you need to decode the legalese and read the fine print to understand which one will suit your purpose. All policies do not cover all kinds of risks; so, it is crucial to know what you want. Most people want to be covered for medical expenses and ask for cashless hospitalisation, as hospitalisation costs can be very high in other countries. For instance, if a heart patient requires emergency treatment while on a U.S. trip, the medical bill can be around $20,000-30,000. Also check out if you want coverage for medical evacuation (this is rare but at times people need to be airlifted to get life-saving treatment), accidental death or any other contingency that may occur.
Another popular travel cover is all about protecting your travel costs, especially if you have bought a non-refundable air ticket, hotel deal or cruise package and there is delay or cancellation. Some policies also cover all subsequent charges in case you are compelled to cancel your trip. All these may come separately, in single plans, or you can bundle them for the sake of convenience.
"If you want to buy travel insurance, don't go in blindly. Always follow a systematic method, and take into consideration the duration of the trip, average cost and your existing medical conditions. Then compare the policies that will suit you requirements best," says Dhruv Sarin, Head of Health and Travel Insurance, Policybazaar.com.
WHAT TO CHOOSE AND WHY?
Just like any other policy, a travel cover should be picked based on the buyer profile and his/her requirements. Here is a quick look at the top categories to understand what you need:
Individual travel insurance: It covers an individual during a trip. It starts from the time you board the flight/ship for your trip and continues till you return.
Family travel insurance: It covers the entire family of the insured individual during travel and takes care of travel-related emergencies.
Senior citizen travel insurance: It is for people in the age group of 60-70.
Student travel insurance for overseas education: This is a comprehensive cover designed for students travelling abroad on student visas. "It is mandated by some overseas universities to have travel insurance while young people are pursuing their studies there. Student travel insurance provides cover for emergency medical expenses and travel-related contingencies such as loss of baggage, passport and personal accident," says Parag Gupta, Chief Underwriting Officer at Bharti AXA General Insurance.
Corporate travel insurance: This one is designed for corporate employees.
Single-trip insurance: This plan provides coverage for the duration of an entire trip.
Multi-trip insurance: This one offers extended coverage, usually for a year, and is specifically designed for frequent travellers so that they do not have to purchase a cover every time they go abroad.
Although these travel covers are crucial if you are travelling abroad, domestic travellers need not be too worried and buy one separately. "Domestic travel insurance may not be necessary as you are in your own country and you are likely to be covered by your individual health insurance, life insurance or personal accident (PA) policy. It means the majority of the risks are already being taken care, and travel inconvenience benefits (flight delays, for instance) are not that important," says Nikhil Apte, Chief Product Officer, Royal Sundaram General Insurance.
However, Puneet Sahni, Head of Product Development at SBI General Insurance, would like domestic travellers to play it safe. "Emergencies may happen any time, even when you are travelling within the country. In case you don't have a health insurance in place, having a domestic travel policy [with healthcare and other benefits] can be of utmost importance," he says. (See Table: Why You Need to Buy Travel Cover).
HOW MUCH DO YOU NEED
Getting the most out of your travel insurance is all about choosing the right insurance cover. While buying a policy, you need to consider key criteria such as destination, duration of stay, possible medical expenses (including sports/activity-related injuries in case your focus is thrill or adventure travel), the cash and valuables you will be carrying, trip cancellations in case of multi-trips, and policy limits and exclusions.
"More and more international travellers are opting for travel insurance as they realise how costly overseas medical treatment can be. Plus there can be significant losses if important documents or belongings are misplaced," says Anuj Gulati of Religare Health Insurance.
Trip duration, too, plays a key role in deciding the amount. You can choose a lower sum insured if you are travelling for a week or so. But the longer you stay, the bigger the risk factors and, hence, you need to go for a higher sum insured. According to Apte of Royal Sundaram, for any Asia trip excluding Japan and South Korea, a sum of $50,000 should be adequate. For Europe a minimum of $100,000 is good. But for the US, you should go for a minimum of $200,000. For a US trip spanning more than three months, it is advisable to take a $500,000 cover. "Also, read the policy carefully to learn what is included and what is not in your policy," adds Gupta.
Premiums can be high or low based on these factors. Simply put, what you pay for your travel insurance largely depends on the cost of health care in the country you are travelling to, its general conditions (some countries are considered more dangerous than others), your age and whether you are suffering from any medical condition.
"As the main benefit of travel insurance is to provide you with financial help if you are to fall ill in another country, your health and medical history will greatly impact the pricing," says Sudarshan Motwani, Chief Executive of BookMyForex. The exact cost will depend on the severity of your medical condition. So it is important to give as much details as possible to the insurer.
The most basic policy at BookMyForex has premiums ranging from Rs 470 to Rs 4,412 for the duration of 1-180 days, excluding Canada and the US. Premiums that include these two countries vary between Rs 730 and Rs 10,061 for the same time frame. One of the most expensive plans offering additional coverage such as aircraft hijacking has premiums varying bwqetween Rs 1,060 and Rs 25,891. The travel cover at Religare Health Insurance starts from Rs 373 for Asia, with a coverage of $50,000 for a travel period of five days. And the same plan for a worldwide cover, including the US, starts from Rs 700 (See Table: Price comparison).
"It's imperative to understand that the premium is not directly proportional to the sum insured. If you are upgrading your cover from $50,000 to $100,000, the premium will go up by 10-20 per cent and not 100 per cent," says Sarin of Policybazaar.com.
WHERE TO BUY
Now that you have figured out the kind of coverage you will require, get the best possible plan from a reliable provider. Just visit websites such as BookMyForex.com or Coverfox.com or go to the site of any other travel insurer and buy it online. Best of all, you need not upload documents or medical reports. "One can also take travel insurance from his/her tour operator, but the quickest way is to get it online," says Gupta of Bharti AXA.
"It's a simple procedure as overseas travel insurance is largely pre-underwritten, and pre-existing diseases and elective treatments are never covered," says Apte. However, some companies have a provision of medical tests for people aged 70 or above. One has to pay out of pocket for these tests and provide the reports to the company. The sum insured for this age group is usually $50,000 or more.
BE A SAVVY CUSTOMER
Servicing the claim of the policyholder is the responsibility of the insurer, but a customer should also know the process. Every insurance company has an assistance company or a third party administrator (TPA) that processes its claims abroad. Should the need arise, you must contact this assistance company whose contact details are mentioned in the policy. "In case you need help, send an e-mail to the company with your facts and issues, and also call its call centre for assistance," says Apte.
"Relevant documents such as one's passport with the immigration stamp, claims form, copy of policy, original bills and receipts, police report (if applicable) and personal identity proof should be kept handy," adds Motwani. In case one is unable to contact the insurer/service provider due to unavoidable circumstances, it is essential to update them before 30 days from the date of occurrence or as mentioned under the particular policy.
Finally, if you have to undergo a planned check-up/treatment, the insurer will help you find the network hospitals where you can get cashless treatment done. "If you are getting treated at a medical centre other than the provider network, carry all the bills and relevant documents, report back to India and make a reimbursement claim from India like any regular health insurance policy claim," advises Mahavir Chopra, Director, Life and Health Strategic Initiatives, Coverfox.com.